Poverty Reduction and the Philippine Tourism Industry


Joblessness is at the core of extreme poverty in the country today.  Poor people without jobs will remain poor.

The latest survey conducted by the Social Weather Stations (SWS) showed that the number of unemployed Filipinos rose to 11.3 million in March this year, up by 1.4 million from 9.9 million in November last year.  It means that joblessness is rising under the Aquino administration and that Pres. Aquino still has no effective job creation program. 

The Aquino government’s flagship program of Public-Private Partnership (or PPP) has created very few jobs so far because there are very few takers of the projects the government is offering to private investors under the PPP.

The result of the SWS survey also tells us that an average of 350,000 Filipinos were joining the ranks of the unemployed every month during the surveyed period.  Our total population of about 11.3 million unemployed Filipinos is bigger than the entire 2010 population of Singapore (5.08M), Hongkong-China (7.0M), New Zealand (4.3M), Switzerland (7.8M), Austria (8.2M), Finland (5.4M), Belgium (10.9M), Israel (7.7M), and many other countries in the world.  

In the past we tried to create more jobs through emergency employment programs and labor-intensive public works and services.  Such measures were, for the most part, “stop-gap remedies” that neither provided enough jobs nor contributed significantly to our economic growth. 

Even now, it is not uncommon for local executives to engage in the parochial practice of maintaining their captured voters with contractual, co-terminus jobs such as street sweeper, irrigation ditch tender, traffic aide, garbage collector, barangay tanod, and the likes .  But that is not to say that we should not have these jobs at all.

Our worsening problems of unemployment and incidence of poverty require that we go beyond the usual contingencies and inadequate measures in our efforts to accelerate job growth and reduce poverty in the country. 

We should explore the idea of inducing growth in strategic industries and economic activities that employ the most people and where job creation is faster and more cost-effective  — tourism, for example.

Tourism employs millions of Filipinos, in addition to generating NET foreign currency, government revenue and economic activities.  Consider the following data:

   The Philippines received a total of 3.5 million inbound visitors and generated US$2.4 billion (about PhP112.56 billion) for the year 2010.   Very modest compared to the performance of our neighboring countries for the same year (Hongkong-China:36.03 million inbound visitors, Malaysia: 24.6M, Thailand: 15.5M, Singapore: 11.64M and Indonesia: 7.0M), but the US$2.4 billion which was infused into the economy has fueled substantial economic activities and provided employment and livelihood to many Filipinos. 

•  The industry ranks the highest in employment generation with an employment multiplier of about 25 persons per one million peso of tourist expenditure.

•  Tourist expenditure has repercussive (or multiplier) effects throughout the economy.  The direct effects occur in tourism-oriented establishments where the expenditure takes place, creating output, value-added income and employment in these establishments.  The indirect effects occur in those activities supplying goods and services to these establishments, creating additional output, income and employment there and so on.

•  The government earns revenue of about 6 centavos per peso tourist expenditure.

  The industry has the highest net foreign exchange earning of about 85 centavos for every peso of tourist expenditure.

The production of goods and services for final consumption in the tourism industry requires the least amount of importations with about 15 centavos per peso of consumption demand.  In contrast, the average import contents of investment goods and non-tourist exports are about 24 centavos and 23 centavos respectively per peso value of goods.

•  Combined, the 7 subsectors of the tourism sector (recreational services, restaurants, air transport, hotels, travel agencies, tourist bus/car services and tourist shops) employ about 7 million Filipinos and contribute about 15% to the GDP (measured in terms of Value Added by the Tourism Industry, or VATI, to the GDP).

Think of what a significant increase in tourist numbers and expenditures can do for our efforts to accelerate job growth and expansion of the economy in general.

At present the tourism industry is totally reliant on our “natural attractions” as motivation for tourists to visit.  Though unique in many ways, our natural attractions are not sufficient enough to attract the number of tourists required to support a significant tourism sector. 

Reliance on natural attractions to attract tourists is called “primary factor driven strategy” by industry experts, which is characterized by infrastructure inadequacies, insufficient accommodation and medium to low quality products, inadequate airlift, and limited investment in new products.

To achieve a significant growth in tourist numbers and expenditures, the industry will need sustained investment in all aspects of tourism: infrastructures, utilities, new products (e.g. health and wellness, cruise, yachting, marinas, conferences, incentives, etc.), ancillary services, destination packaging and marketing, and human resource development.

Let us pause for a while from our fixation on the “big ticket” projects of the PPP — projects that may only be realized with tremendous odds and difficulties — and take a second look at the more modest tourism programs and projects that will “directly” induce growth in the industry.  The industry, after all, provides employment and livelihood to about 7 million Filipinos, contributes about 15% to the GDP, and is an excellent generator of jobs and economic activities.

Finally, all our development efforts in the industry must take place against the background of environmental protection, sustainable tourism, and deterrents to drug trafficking/abuse and the exploitation of our women and children.

Author:  Rene “RC” Catacutan
Published 30 May 2011


May 18, 2013 updates:

1)  The percentage of Filipinos living below the poverty line has remained unchanged since 2006, according to the latest poverty data released by the National Statistics Office on April 23, 2013.

2)  The survey conducted by the Social Weather Station for the period March 10-22, 2013 revealed that the total number of unemployed Filipinos increased by 1 million in the first quarter of 2013.


Popular destinations/events in the Philippines

The geographical location of the Philippines. 

The ancient Banaue Rice Terraces in the province of Ifugao, a 2,000-year-old mountain rice terraces declared as a World Heritage Site by the UNESCO and generally regarded as the 8th Wonder of the World.

The Boracay island in the province of Aklan — world famous for its pristine white-sand beaches, calm and clear water and healthy natural reef appealing to snorkelers and divers.

Fil-Canadian Elsie Fajardo

Canadian Elsie Fajardo (originally from Aliaga, Nueva Ecija, Philippines) enjoying a dip at Subic Bay, Olongapo City.

Manila Bay business and commercial district at night.

Image of the Tubbataha natural reef in the island province of Palawan (declared a World Heritage Site by the UNESCO), a haven for both divers and marine biologists.





A re-enactment of The Crucifixion during the observance of the Catholic’s lenten season.





The picturesque and still active Taal Volcano and lake in the province of Batangas as viewed from Tagaytay City, Cavite. 





Canadian Elsie Fajardo “jamming” with cultural dance performers in Tagaytay City. 





Image of the El Nido beach resort in the province of Cavite — one of the many beautiful beach resorts dotting the 7,100 islands of the Philippines.





The central business and commercial district of Makati City at night.

The picturesque and still active Mayon Volcano in the province of Albay — famous for its near perfect cone shape.





Underground river in the island province of Palawan.

View from Cabugao Gamay island in Islas de Gigantes (photo credit - tripadvisor.com)

A view from Cabugao Gamay island in Islas de Gigantes (also known as Islas de Encantada to locals), a group of islands off the northern coast of Iloilo Province in central Philippines.  Least visited by both local and foreign tourists due to the challenging accessibility of the islands from Manila, a visitor to Islas de Gigantes is rewarded with spectacular sceneries of virgin islands, colorful marine life, and extraordinary land and rock formations (photo credit: tripadvisor.com) 

Rizal National Park (also known as Luneta Park) in the City of Manila, a sprawling multi theme park named after the national hero Dr. Jose Rizal. 





“Close encounter” with the annual migration of Butanding (whale sharks), the largest living fish species, in the coastal town of Donsol, Sorsogon, from November to May.





Image of Ati-atihan, a religious cum mardi gras festival which originated in the province of Aklan and is held annually in January in honor of The Santo Niño (The Infant Jesus).





Pagsanjan Falls in the province of Laguna, where “shooting the rapids” is a popular attraction and adventure among local and foreign tourists.

Burnham Park, a man-made leisure pond and park in the northern mountain resort City of Baguio.





Canadian Elsie Fajardo at the Burnham Park in Baguio City.

“Chocolate Hills” in the province of Bohol where the Philippine Tarsier, the smallest primate in the world (measuring 4-5 inches), can also be found.





Surfing destination in the island of Siargao, Surigao Del Norte.

Panagbenga Flower Festival in Baguio City which is held annually in February and highlighted by a colorful parade of theme floats bedecked with thousand of cut flowers grown in the area.





Canadian Elsie Fajardo at the Butterfly Haven in Baguio City.

Images of destination sites in the “World Heritage” island province of Palawan.





A gate in the ruins of  Spanish-era Fort Santiago in the old “walled city of Intramuros” in Manila.





Ocean Adventure Park, Southeast Asia’s only open water marine park, in Subic Freeport Zone, Olongapo City.





Image of the “Hundred Islands” in the province of Pangasinan, a favorite summer destination among local tourists.





Maria Cristina Falls in Iligan City, which is also referred to as the “City of Majestic Falls” because of the presence of more than 20 waterfalls in the city.




Sunset at the Manila Bay

Sunset at the Manila Bay along the Roxas Boulevard baywalk strip, a favorite spectacle among couples, strollers and joggers.





Image of Christmas in the Philippines — the longest (September to early January the following year) and the most colorful Christmas season in the world.